The Nil rate band for estates has been frozen at £325,000 since 2009/10
It is likely to be at this level until at least 2028, despite house prices having risen significantly over this period.
There is a further Nil amount of up to £175,000 available to those passing on a qualifying residence on death to direct descendants, and these allowances can be passed to the surviving spouse or civil partner if unused on first death, so up to £1 million may be available at Nil rate.
Many individuals will make use of ISAs to shelter the funds from income tax on interest etc. However, these investments will still form part of the estate for IHT purposes. Likewise, any gifts in excess of £3,000 will be treated as part of the estate up to 7 years after the date of the gift.
There are various ways of helping to mitigate the potential IHT – gifts out of income, and IHT tax efficient investments are just two methods.
We appreciate that many people take the view that “whatever the kids get will be a lot more than we ever had”, but there are others that take the view that the money is better in the family than going to the Government!
If you would like to investigate this further, please give us a call.
We can provide you with a form to list your assets and liabilities and can then estimate the potential IHT and discuss ways of either mitigating this or providing the funds to enable payment to be made.
